Here is some generally directional, untied options activity that caught my eye during Friday’s trading:
1. CSCO – The stock held the prior week’s 10% gains from earnings and traded within a very tight range of $29 to $29.50 for most of the holiday shortened week until it closed at new 52 week and multi-year high:
Friday saw some call buying, with calls outnumbering puts 3 to 1. The largest block of the day was a buy of 10,600 April 30 calls for .48 when the stock was $29.39, 17,000 ended up trading on the day. The Feb 27th weekly 30 calls were also active with 12,600 trading, most looking to be bought to open as short term traders look to play for a continuation of the breakout.
2. AMAT – Thursday saw heavy call volume in the stock as it rallied 3.5% on no news, from Thursday’s post:
AMAT – saw opening call buying. When the stock was 24.57 a trader paid .87 for 20,000 Feb 27th weekly 24 calls, and 10,000 of the Feb 27th weekly 24.50 calls were bought for .55 also to open. Total options volume ran more than 6x average daily volume, with calls making up nearly 90% of the volume. Tied for the most active strikes outside the weeklies just detailed were 22,000 of the April 27 calls and 22,000 March 26 calls.
Friday saw heavy call volume for the second straight day at 2.5x average daily volume, but it looked traders were closing out some of the calls bought Thursday. When the stock was $25, the March 26 / April 27 call stupid was closed for 1.36 (.68 per leg) 12,500x, this trade was bought the prior day for 1.30 (.65 per leg) when the stock was $25.04.
3. MS – options volume ran 2x average daily volume as puts outnumbered calls more than 3 to 1. When the stock was $36.18 around noon there were two large blocks of 10,000 March 32 puts bought to open for .13, with a total of 30,500 trading on the day. These puts break-even at $31.87 on March expiration, in a little less than a month, down 12%. These puts could be disaster protection against a long position, as the only scheduled events for banks in March are the Stress Test results from the Federal Reserve due March 5th and 11th.
4. C – the two most active strikes were puts, with 20,000 of the March 45 puts bought for .20 when the stock was 50.79, these looked to be closing. But when the stock was 50.56 shortly after the open on Friday a trader paid 60 cents for 10,000 of the Feb 27th weekly 50.50 puts to open, these puts break-even at $49.40, down 2.2% on Friday’s close at $49.40.
5. SMH – a couple weeks back we highlighted some bearish options flow in the Semiconductor etf:
from Feb 12th: when the SMH was $55.64, a trader paid 1.03 for 45,000 March 54 puts to open.
from Feb 13th: when the SMH was $56.28 a trader paid 1.02 for 50,000 March 55 puts to open
On Friday when the SMH was $56.25 there was a buy of 10,000 of the March 55 puts for 90 cents.